Data Driven: Making Sense of It All
Data are everywhere. Anyone with a smartphone is his or her own (not so private) data point. Technology—and an ever-growing need to track, measure and optimize ROIs—has fostered a corresponding need to analyze and understand data.
In today's world, marketers are exposed to an abundance of data and analytics. The challenge is making sense of it all and using it to guide actions and decisions, not to paralyze or impair them.
Understanding the intended action that will come from information and its analysis is a good place to start. In rather simple terms, data and analytics are used for three broad purposes:
1. Describe: Data can tell a story about what has happened. It is often a snapshot in time that provides information on—or a description of—something that has occurred.
2. Predict: Data are often used to forecast a future occurrence or outcome. There are a host of predictive techniques that use sets of data points to make educated assumptions about the future.
3. Decide: Data are almost always used to help inform and guide some business decision and action. Data are at the heart of most organizations' performance measurement systems and are used to make key decisions.
Data and analytics can be used for any one of these purposes, or for all three. A framework for interpretation and use of data and analytics leans heavily on the basic scientific method we were taught in grade school. The framework relies on a four-step process, with each step having its own set of golden rules.
Step 1: Know the
Question and the
Answer in Advance
If you don't start with a clear understanding of what you are trying to find out or what problem you are attempting to solve, making sense of the data can be difficult. In addition, go into the process with a reasonable definition of success, failure or any gray area in between. A clear or even broad idea of how to define success at the beginning of the process can result in a timelier, productive analysis at the end.